Working with in-country modelling teams and models, targeting net-zero CO2 emissions by later this century, and using decomposition and emissions driver analysis, we develop low emissions cement and steel scenarios linked to usable policy levers for Brazil, India, and South Africa. We find significant mitigation potential from a 'current policy' scenario on the demand side (13-26%) and the production side (58-71%), but these countries' substantial needs for more basic infrastructure - and thus for cement and steel inputs - indicate net-zero will remain very challenging. Demand-side material efficiency reductions, where less steel and cement deliver the same service through better design, will require decades of educational and regulatory efforts, working with buildings sector and infrastructure supply chain actors to reach full potential. In the short to medium run, focusing on reducing emissions from production may deliver more near-term cumulative mitigation by allowing close attention to a small number of domestic companies with high managerial, technical, and financial capacity. To achieve such reductions, governments should encourage the concentration of cement and concrete making at professional facilities to allow the use and regulation of already commercialized lower GHG practices like cementitious material clinker replacement and better concrete mixing while planning for future carbon capture and storage. Governments should also encourage investment in secondary steel making using electric arc furnaces to reuse local recycled scrap, eventually supplemented with increasingly low emission primary iron. International cooperation and support are needed to agree on and implement CO2 intensity accounting systems, improve access to low-emissions production technologies through innovation and commercialization combined with technology transfer or co-development, and offer financial and technical support for clean production investments.Key policy insightsOn the demand side, international buildings organizations and domestic building code regulators should work with architects, structural engineers, and construction companies to implement regionally appropriate material efficiency options.On the production side, international cement and steel organizations, governments and domestic firms should explore cooperation on technology innovation and transfer, finance, and private and public lead market mechanisms, e.g. premia for low emission production and green procurement.Adaptive long-term sectoral strategies addressing demand and supply will need to be developed with all affected parties.

Steel production is one of the major sources of greenhouse gas (GHG) emissions. Brazil is one of the largest steel producers in the world and its main energy sources for steel production are coal, electricity, and charcoal. The latter shows a peculiarity of Brazil in relation to other countries: the use of biomass. This study has developed an optimization bottom-up model describing the steel industry to explore pathways for the decarbonization of the Brazilian steel industry. The model minimizes the mitigation costs, considering a set of measures (energy effi-ciency technologies and innovative production routes), constrained by the availability of raw materials and the diffusion of new technologies. In addition, the model stands out by incorporating crucial elements for a circular bioeconomy strategy: scrap and biomass supply, as well biomass-based production technologies. We developed four scenarios: business-as-usual (BAU) and three mitigation scenarios aligned with different GHG mitigation goals in 2050: 0% (no emission increase scenario - NIS); 42% (sustainable development scenario - SDS) and 88% (deep sustainable development scenario - SDS+). Results show that GHG mitigation in the short term can be achieved by the adoption of well known technologies (energy efficiency, charcoal-based BF-BOF, and EAF) at negative mitigation costs (between-35.3 and -1.5 $/tCO2e). Innovative routes play a key role in reaching emission goals but increase the mitigation costs until 2050 (between 23.4 and 43.4 $/tCO2e). Smelting reduction with charcoal is present in all scenarios, reaching up to 24% of steel production in 2050 (SDS+). Direct reduction (DR) is applied to reach more ambitious levels of GHG mitigation in SDS and SDS+. In SDS, DR with natural gas is implemented in 2029, reaching its higher share of production in 2050 (21%). In SDS + natural gas has a transition role. It starts to be used in DR in 2025, increasing until 2043, when hydrogen begins to replace it. By 2050, charcoal becomes the main energy source in all decarbonization scenarios. The results and insights pro-vided by this study can help policymakers towards decarbonization.

This study assesses the expansion of the Brazilian energy system across three GHG emissions pathways simulating the achievement of the Brazilian Nationally Determined Contribution. In the Reference scenario, the NDC is achieved through command-and-control policies. We then compare this pathway to an Emissions Pricing Scenario (EPS), which simulates a carbon pricing scheme. The Sensitive Fuels Exemption Scenario (SFE) is similar to the latter, but gasoline, diesel and liquefied petroleum gas are exempted from pricing, strengthening political buy-in to the mechanism. An integrated modelling approach combines bottom-up models representing energy demand and supply and a macroeconomic framework to ensure consistency across them. The adoption of carbon pricing schemes enables the use of a large potential of offsets (from the restoration of native vegetation) at a limited cost. This allows meeting NDC targets with bounded use of expensive mitigation actions comprised in command-and-control tools in the reference scenario. This study shows that a carbon pricing policy can increase the effectiveness of meeting climate commitments in Brazil, reducing GDP losses against business-as-usual trends. However, the mechanism's scope and sectoral coverage are key to ensure that decarbonisation is pursued in all economic sectors and in line with climate targets beyond the NDC horizon.

This report contains policy recommendations to realise national deep decarbonization pathways based on in-country scientific model-based analysis in four countries: Brazil, India, Indonesia and South Africa. This digest includes a description of deep decarbonization scenarios’ main features, main synergies and trade-offs with country non-climate objectives, priority short-term policies and actions and key international enablers and accelerators of domestic transitions. Thus, it provides relevant information for the Mitigation, Finance flows and Means of Implementation & Cross-cutting thematic areas of the Global Stocktake (GST). Whereas the report does not provide a collective picture, bottom-up granular policy lessons from these four large emerging economies are essential input to assess the adequateness of the progress achieved and necessary action to keep the global long-term goals of the Paris Agreement within reach.